2. Neutral elements are goods used in the production, testing or inspection of another good but not physically incorporated into the good, or goods used in the maintenance of buildings or the operation of equipment associated with the production of a good. These include:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices and supplies used for testing or inspecting the goods;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;
(g) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.
14. Interchangeable Materials
1. In determining whether a good is an originating good, any interchangeable materials shall be distinguished by:
(a) physical separation of the goods; or
(b) an inventory management method recognized in the generally accepted accounting principles of the exporting Party.
2. Interchangeable materials are goods or materials which are interchangeable for commercial purposes, whose properties are essentially identical, and between which it is impractical to differentiate by a mere visual examination.
15. De Minimis
A good that does not meet tariff classification change requirements, pursuant to the provisions of Annex 5, shall nonetheless be considered to be an originating good if:
(a) the value of all non-originating materials, including materials of undetermined origin, that do not meet the tariff classification change requirement does not exceed 10% of the FOB value of the given good, determined pursuant to Article 6 of this Chapter; and
(b) the good meets all the other applicable criteria of this Section.
16. Compliance
Compliance with the requirements of this Section shall be determined in accordance with the provisions of Section 2 as applicable.
Section 2. Operational Procedures
17. Claim for Preferential Tariff Treatment
Except as otherwise provided in this Chapter, each Party shall require an importer that claims preferential tariff treatment for a good imported into its territory from the territory of the other Party to:
(a) request or claim preferential tariff treatment at the time of importation of an originating good, if required by the importing Party’s customs administration;
(b) make a written declaration, if the Party deems it necessary, that the good qualifies as an originating good;
(c) have the origin document in its possession at the time the declaration is made;
(d) provide, on the request of that Party’s customs administration, a copy of the origin document, other documentary evidence of origin, and such other documentation relating to the importation of the good in accordance with the domestic laws and regulations of the importing Party; and
(e) promptly make a corrected declaration in a manner required by the customs administration of the importing Party and pay any duties owing, where the importer has reason to believe that an origin document on which an entry declaration was based contains information that is not correct.
18. Refund of Import Duties or Deposits
1. Where the importer does not satisfy the requirements of Article 17 at the time of importation of a good from a Party, the importing Party may impose the applied non-preferential import customs duty or require payment of a deposit on that good, where applicable. In such a case the importer may apply for a refund of any excess import custom duty or deposit paid within one year of the date on which the good was imported, provided that:
(a) a written declaration that the good presented qualifies as an originating good was provided to the customs administration of the importing Party at the time of importation; and
(b) a valid origin document, as the case may be, is provided in relation to the good imported.
2. Any excess import customs duty paid shall be refunded to the importer as soon as possible following a determination by the customs administration of the importing Party that a refund is due.
3. Any excess import deposit paid shall be refunded to the importer within one month, or in a shorter time period specified by the importing Party’s domestic laws and regulations, provided that the importer has fulfilled the requirements for such a refund.
19. Certificate of Origin
1. A Certificate of Origin shall be in the format as set out in Annex 6, and shall:
(a) contain a unique certificate number;
(b) be applicable to one or more goods under a single consignment;
(c) state the basis on which the goods are deemed to qualify as originating for the purposes of Section 1 of this Chapter;
(d) contain security features, such as specimen signatures or stamps as advised to the importing Party by the exporting Party;
(e) be marked “ORIGINAL”; and
(f) be completed in English.
2. A Certificate of Origin shall remain valid for 12 months from the date of issue.
3. A Certificate of Origin may be issued retrospectively within one year from the date of shipment, bearing the words “ISSUED RETROSPECTIVELY” and remain valid for one year from the date of shipment, if it was not issued before or at the time of shipment due to force majeure, involuntary errors, omissions or other valid causes determined by an authorized body of the exporting Party.
4. Notwithstanding paragraph 1(e), in the event of theft, loss or damage of a Certificate of Origin, the exporter or manufacturer may make a written request to the authorized bodies of the exporting Party for issuing a certified copy, provided that the exporter or manufacturer makes sure that the original copy previously issued has not been used. The certified copy shall bear the words “CERTIFIED TRUE COPY of the original Certificate of Origin number dated ”. If the importing customs administration ascertains that the original copy has been used, the certified copy shall be invalid and vice versa.
5. The format and any requirements set out in Annex 6 may be revised or modified by joint decision through an exchange of letters between theParties.
20. Approved Exporter
1. A Party may implement an approved exporter system under this Agreement, which allows an approved exporter to complete a Declaration of Origin by an Approved Exporter. The approved exporter shall be approved and administered by the exporting Party.
2. An approved exporter shall be issued a unique identification number by the exporting Party. The use of unique identification numbers by approved exporters shall be monitored and supervised by the exporting Party.
3. Each Party shall provide the other Party with the following information on the approved exporters:
(a) their name;
(b) unique identification number;
(c) contact details of the approved exporters; and
(d) any other information mutually determined by the Parties, prior to the actual exportation of their goods.
4. Any change in the information provided under paragraph 3 shall be promptly notified to the other Party.
21. Declaration of Origin by an Approved Exporter
1. An approved exporter under Article 20 of this Chapter in a Party may, for the purposes of obtaining preferential tariff treatment in the other Party, complete a Declaration of Origin by an Approved Exporter that meets the requirements set out in Annex 16.
2. The Declaration of Origin by an Approved Exporter shall contain a unique serial number.
3. A Declaration of Origin by an Approved Exporter shall only be produced if the good concerned qualifies as an originating good in accordance with the provisions of this Chapter.
4. Where the approved exporter in the exporting Party is not also the producer of the goods, a Declaration of Origin by an Approved Exporter for the good may be completed by the approved exporter in accordance with requirements of the exporting Party.
5. A Declaration of Origin by an Approved Exporter shall be valid for 12 months from the date of its completion.
6. The electronic data contained in the Declaration of Origin by an Approved Exporter shall be exchanged between the Parties through the Joint Electronic Verification System.
22. Declaration of Origin Based on an Advance Ruling
1. A Declaration of Origin based on an Advance Ruling shall be in the format as set out in Annex 7, and shall be accepted in place of a Certificate of Origin for any consignment of goods covered by an advance ruling in accordance with Article 9 of Chapter 5 (Customs Procedures and Trade Facilitation) that deems the good to qualify as originating, so long as the facts and circumstances on which the ruling was based remain unchanged and the ruling remains legally valid.
2. A Declaration of Origin based on an Advance Ruling shall cover the goods presented under a single import customs declaration, and shall remain valid for 12 months from the date of issue.
3. The format and any requirements set out in Annex 7 may be revised or modified by joint decision through an exchange of letters between the Parties.
23. Waiver of Origin Document
1. For the purposes of granting preferential tariff treatment under this Chapter, a Party shall waive the requirements for the presentation of an origin document and grant preferential tariff treatment to:
(a) any consignment of originating products of a customs value not exceeding US$1,000 or its equivalent amount in the importing Party's currency, or such higher amount as that Party may establish; or
(b) any other originating goods as provided under a Party’s domestic laws and regulations.
2. Waivers provided for in paragraph 1(a) shall not be applicable when it is established by the customs administration of the importing Party that the importation forms part of a series of importations that may reasonably be considered to have been undertaken or arranged for the purpose of circumventing the requirements of this Chapter.
24. Amendments to Origin Documents
1. Neither erasures nor superimpositions shall be permitted on any origin documents. Any amendment shall be made by striking out the erroneous information and making any addition which might be required. Such alterations shall be endorsed by the person who made them.
2. Any unused space shall be crossed out to prevent any addition subsequent to certification.
25. Retention of Origin Documents
1. Each Party shall require its producers, exporters and importers to retain origin documents for a period specified in its domestic legislation.
2. Each Party shall ensure that its authorized bodies retain copies of Certificates of Origin and other documentary evidence of origin for a period specified in its domestic legislation.
26. Authorized Bodies
1. A Certificate of Origin shall be issued only by an authorized body in the exporting Party.
2. Each Party shall inform the customs administration of the other Party of the name of each authorized body, as well as relevant contact details, and shall provide details of any security features for relevant forms and documents used by each authorized body, prior to the issuance of any certificates by that body. Any change in the information provided above shall be advised promptly to the customs administration of the other Party.
27. Verification of Origin
1. For the purposes of determining whether goods imported into the territory of a Party from the territory of the other Party qualify as originating goods, the importing customs administration may verify any claims for tariff preference by means of:
(a) written requests for additional information from the importer;
(b) written requests for additional information from the exporter or producer in the territory of the exporting Party;
(c) requests that the customs administration of the exporting Party verify the origin of a good;
(d) requests for a verification visit to the premises of the exporter or producer, which shall be conducted with the prior consent and assistance of the customs administration of the exporting Party according to procedures jointly decided by the customs administrations of the Parties; or
(e) such other procedures as the customs administrations of the Parties may jointly decide.
2. A verification action process under paragraph 1 shall only be initiated when there are reasonable grounds to doubt the accuracy or authenticity of origin documents, the origin status of the goods concerned or the fulfilment of any other requirements under this Section, and when customs duty is sufficiently material to warrant the request.
3. A verification request to the customs administration of the exporting Party shall specify the reasons, and include any relevant documents and information obtained that justifies the verification activity.
4. The customs administration of the exporting party shall respond promptly to any verification request under paragraphs 1(c) or 1(d) and advise the customs administration of the exporting Party of the verification result within 6 months from the date of the verification request being sent by the importing customs administration, or any longer time that is mutually determined by the Parties.
28. Joint Electronic Verification System
1. The Parties reaffirm their commitment to the utilization and further development of the Joint Electronic Verification System to facilitate trade between the Parties and to promote the transition to a paperless trading environment.
2. Where origin data is transmitted through the Joint Electronic Verification System, the importing customs administration shall not require importers to submit a physical copy of an origin document upon importation.
29. Denial of Preferential Tariff Treatment
1. A Party may deny preferential tariff treatment to a good when:
(a) the name of the relevant authorized body or any security features for relevant forms and documents used by that authorized body, or any change in the above information, has not been advised to the customs administration of the other Party;
(b) the importer, exporter, manufacturer or producer, as appropriate, fails to provide information which the Party has requested in the course of a verification process under Article 27 of this Chapter, or the requested customs administration is unable for any reason to respond to the request to the satisfaction of the importing customs administration, within 6 months of the date of request; or
(c) the good does not or did not comply with the other requirements of this Chapter, including where:
i. the Certificate of Origin, Declaration of Origin by an Approved Exporter or Declaration of Origin based on an Advance Ruling has not been duly completed and signed;
ii. the origin of the goods is not in conformity with Section 1;
iii. the data provided under the Certificate of Origin, Declaration of Origin by an Approved Exporter or Declaration of Origin based on an Advance Ruling does not correspond to those of the supporting documents submitted; or
iv. the description, quantity and weight of goods, marks and number of packages, number and kinds of packages, as specified, do not conform to the goods imported.
2. In the event preferential tariff treatment is denied, the importing Party shall ensure that its customs administration provides in writing to the exporter, the importer or producer, as the case may be, the reasons for thatdecision.
30. Minor Errors or Discrepancies
1. Where the origin of an imported good is not in doubt, minor transcription errors or discrepancies in an origin document shall not of themselves render that origin document invalid if it does in fact correspond to the imported good.
2. For greater certainty, nothing in this Article shall prevent the customs administration of the importing Party from initiating a verification process pursuant to Article 27.
31. Review
The competent authorities of the Parties shall review the procedures under this Section as they mutually deem necessary.
32. Rules of Origin Committee
1. The Parties hereby establish a Committee on Rules of Origin comprising representatives from the customs administrations of the Parties.
2. The Committee shall meet on the request of either Party to review and monitor matters arising under this Chapter and consider any issues arising from their implementation. For this purpose, contact points should be designated by the customs administrations of each Party. The Parties shall notify each other promptly of any amendments to the details of their contact points.
3. The Committee shall meet at venues and times as agreed between the Parties.
4. The Committee’s functions shall include:
(a) furthering the uniform, effective and consistent administration of this Chapter and enhance cooperation to this end;
(b) reviewing the ongoing implementation of Annex 5 to ensure it is consistent with the neutral transposition of the Harmonized System and, if necessary, make proposals to the FTA Joint Commission for the amendment of Annex 5;
(c) addressing technical issues related to the implementation of this Chapter and Annex 5, such as issues relating to tariff classification and regional value content calculation; and
(d) considering proposals aimed at further facilitating trade between the Parties.
Appendix 2 . NEW CHAPTER 5 (CUSTOMS PROCEDURES AND TRADE FACILITATION)
Chapter 5. CUSTOMS PROCEDURES AND TRADE FACILITATION
Article 1 Definitions
For the purposes of this Chapter:
customs administration means:
(a) in relation to China, the General Administration of Customs of the
People’s Republic of China; and
(b) in relation to New Zealand, the New Zealand Customs Service;
customs law means any legislation administered, applied, or enforced by the customs administration of a Party;
customs procedures means the treatment applied by each customs administration to goods and means of transport that are subject to customs control;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
Implementing Arrangements means any subsidiary documents to this Chapter which set out the mutually determined mechanisms for applying, or outcomes derived from applying, the principles and processes outlined in this Chapter;
means of transport means various types of vessels, vehicles, aircraft and pack- animals which enter or leave the territory carrying persons, goods or articles;
trade administration document means the forms issued or controlled by the customs administration of a Party which must be completed by or for an importer or exporter in relation to the import or export of goods.
Article 2 Scope and Objectives
1. This Chapter shall apply, in accordance with the Parties’ respective international obligations and domestic customs law, to customs procedures applied to goods traded between the Parties and to the movement of means of transport between the Parties.
2. The objectives of this Chapter are to:
(a) simplify and harmonize customs procedures of the Parties;
(b) ensure predictability, consistency and transparency in the application of customs law and administrative procedures of the Parties;
(c) ensure the efficient and expeditious clearance of goods and means of transport;
(d) facilitate trade between the Parties; and
(e) promote cooperation between the customs administrations, within the scope of this Chapter.
Article 3 Competent Authorities
The competent authorities for the administration of this Chapter are:
(a) in relation to China, the General Administration of Customs of the
People’s Republic of China; and
(b) in relation to New Zealand, the New Zealand Customs Service.
Article 4 Facilitation
1. Each Party shall ensure that its customs procedures and practices are predictable, consistent, transparent and facilitate trade.
2. Customs procedures shall:
(a) where possible and permitted by each Party’s respective customs law, conform with trade-related instruments such as those of the WCO to which that Party is a contracting party, including the International Convention on the Simplification and Harmonization of Customs Procedures (as amended), known as the Revised Kyoto Convention; and
(b) be consistent with each Party’s obligations under the Agreement on Trade Facilitation, which is part of the WTO Agreement.
3. Customs administrations of the Parties shall facilitate the clearance of goods in administering their procedures.
4. Each customs administration shall endeavour to provide a focal point, electronic or otherwise, through which its traders may submit all required regulatory information in order to obtain clearance of goods.